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Subbarao gets 2-year extension as RBI chief
Hero MotoCorp to set up two new plants
Govt nod to RIL for stake sale to BP in $7.2
bn deal
Equity rout takes gold to another record of Rs 26,000 |
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RCom launches tablet PC at Rs 12,999
Mahindra Satyam net profit at
Rs 225 crore
Foreign investors allowed to invest up to $13 bn in MFs
RIL in race with Coal India for top valuation slot
Don’t count on China to repeat saviour role
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Subbarao gets 2-year extension as RBI chief
New Delhi, August 9 The Reserve Bank of India (RBI) governor was appointed for a three-year term in September 2008 and was immediately tasked with the mandate of protecting Asia's third-largest economy from the aftermath of the global financial crisis. For much of his term, the soft-spoken Subbarao has struggled to contain high inflation in India, triggered by factors which were not always under his control, and has often been criticised for being ‘behind the curve’. But analysts said Subbarao's record in handling the global financial crisis that erupted in the latter half of 2008 may have gone in favour of his reappointment. "Perhaps he is best placed to deal with the current situation where there are lots of disturbances in the global economy", said N.Bhanumurthy, senior economist at National Institute of Public Finance and Policy, a Delhi-based policy think tank. “There have been some criticism for his handling of inflation but to be fair to him, there were factors beyond his control and most major economies have been experiencing a high trend rate of inflation", said Bhanumurthy. The race for the top job hotted up in recent months with some bureaucrats and economists throwing their hat into the ring. The chief economic adviser to the finance ministry, Kaushik Basu, a former chief economist of the IMF, Raghuram Rajan, and a former adviser to the finance ministry, Ashok Lahiri, were believed to be in the fray.—Reuters |
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Hero MotoCorp to set up two new plants
London, August 9 The company, which today introduced two new products under its new brand, said it will soon tie up with a European firm for technology support. "One of the plants will be in South India. The other one will be in West India. We will be setting aside a war chest," Hero MotoCorp Managing Director and CEO Pawan Munjal told reporters here.— PTI |
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Govt nod to RIL for stake sale to BP in $7.2 bn deal
Mumbai, August 9 The Cabinet Committee on Economic Affairs (CCEA) had on July 22 cleared the sale of stake by RIL to BP in 21 blocks, including the showpiece eastern offshore KG-D6 gas producing area and discovery area NEC-25. However, it held back the same for two inconsequential blocks over technical issues. “RIL has received the government of India’s approval for its transformational deal with BP,” the company said in a press statement. “RIL is grateful to the government of India for the approval, which will result in the largest foreign investment in the domestic hydrocarbon sector.” BP will have to furnish a bank guarantee and performance guarantee, as per the Production Sharing Contract. The deal, which might increase in value to $20 billion on the basis of future performance payments and investment, will give Reliance access to BP’s expertise in deepwater drilling and accelerate development and production from its fields, particularly the under-performing KG-D6 block in the eastern offshore.— PTI ON TRACK
In February, RIL had agreed to sell a 30 per cent stake in 23 out of its 29 oil and gas blocks to London-based BP Plc for $7.2 billion and may get an additional $1.8 billion if the two explorers find more hydrocarbons |
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Equity rout takes gold to another record of
Chandigarh, August 9 In the past six days, the sell-off has wiped $8 billion off the market value of all stocks on the BSE. Gold has been the biggest gainer of the shift to a safer asset in India. Prices in the country rose above Rs 26,000 for the first-time ever on Tuesday rallying with world market and supported by a weak rupee. However, demand in local spot market was sluggish as buyers chose to wait for a correction “Consumers are finding it difficult to accept the current price,” said a dealer with a private Mumbai-based bank, dealing in bullion. Meanwhile, export-driven software firms such as Infosys and Tata Consultancy were among the biggest losers on the Sensex on worries the economic problems could dent demand for outsourcing. Still, the largely domestic-demand driven economy is seen as better placed to withstand the global turmoil, analysts said. |
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RCom launches tablet PC at Rs 12,999
New Delhi, August 9 The 7-inch tablet that runs on Google's Android operating system is manufactured by China's ZTE Corp, but will be sold under Reliance's brand name, said Mahesh Prasad, president of Reliance Comm. The tablet works on both 3G and Wi-fi networks, Reliance Comm said in a statement. Reliance 3G Tab is being launched today in Mumbai, Delhi and Kolkata and will be available in Reliance World and Reliance Mobile stores. “We have believed in bringing products to Indian customers that fulfill their needs and desires with incredible affordability. We believe the unmet demand of a fully loaded tablet at an aggressive price point will now fuel the aspirations of the evolved customers.” — Agencies |
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Mahindra Satyam net profit at Rs 225 crore
Hyderabad, August 8 Hyderabad-based Satyam Computer, which was bought by Tech Mahindra and renamed Mahindra Satyam, posted EBITDA margins of 14.6 per cent for the quarter ended June, compared with 13 percent in the previous quarter. “In the short term, it (economic uncertainty) may lead to budget squeezing, but in the medium term it will be to our advantage,” chief executive CP Gurnani said, indicating overseas customers may increase outsourcing in a tough economic environment to cut costs. The company’s net profit for the quarter ended June was at Rs 225 crore ($50 million) compared with Rs 97.5 lakh a year ago. Analysts had forecast a net profit of Rs 134 crore, according to Thomson Reuters I/B/E/S. The firm said it intends to wind down its American depositary shares programme in order to protect investor interests. Satyam stunned investors in 2009 when its former chairman and founder Ramalinga Raju said profits had been overstated and assets falsified in a fraud, allegedly worth more than $1.5 billion, pummelling its shares.— Reuters |
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Foreign investors allowed to invest up to $13 bn in MFs
New Delhi, August 9 The announcement comes at a time when there are concerns over the flight of foreign capital and is expected to provide much needed succour to the markets. "It has been decided that the aggregate investments by Qualified Foreign Investors (QFIs) in equity schemes of the mutual funds under direct and indirect routes shall be subject to a ceiling of USD 10 billion," a finance ministry statement said. Similarly, QFIs can invest up to an additional amount of USD 3 billion in the units of mutual fund scheme, which invest in infrastructure debt of minimal residual maturity of five years in corporate bonds issued by infrastructure companies, it said. QFI is an individual, group or association, resident in a foreign country that is compliant with the Financial Action Task Force (FATF) standard. It is to be noted that QFIs do not include foreign institutional investors or sub-accounts as these are already permitted to invest in equity and debt markets in India. This would enable QFIs to have direct access to the Indian MFs. It would widen the class of investors participating in the Indian capital market, help increase depth and reduce volatility in the market, it said.— PTI |
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RIL in race with Coal India for top valuation slot
Mumbai, August 9 Within minutes of opening this morning, the market cap of Reliance Industries (RIL) was only 0.75 per cent or Rs 1,874 crore higher than that of Coal India, but the gap widened as the trading progressed in both the stocks. At close, RIL retained its top-slot with a market cap of Rs 2,50,599 crore — about 4 per cent higher than Coal India's 2,40,400 crore and nearly 2 per cent higher than ONGC's 2,44,858 crore. RIL managed to recover from its early morning losses, CIL lost further ground.— PTI |
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Don’t count on China to repeat saviour role
Beijing, August 9 Just two weeks ago, economists were banking on at least one more interest rate rise from the People's Bank of China this year because inflation remained hot. Indeed, Tuesday's figures showed it hit a fresh three-year high at 6.5 per cent. But the worsening global economic outlook has many people predicting a policy about-face. Asia's stock markets tumbled on Tuesday as investors fretted over the risk of another U.S. recession and deepening debt crisis in Europe. "It's time for Beijing to announce to the whole world that it will try to stimulate domestic demand again," said Tang Yunfei, an analyst with Founder Securities in Beijing. China's fiscal firepower is not in doubt. With $3.2 trillion in reserves and low public debt, China could afford to kick up spending, but the side effect would be worsening inflation when prices are already rising too fast for comfort. Beijing is particularly sensitive to inflation because relentlessly rising prices can stoke social unrest, which could be dangerous for the Communist Party. Besides, the last round of stimulus in 2008 caused more than a few headaches that linger today. Beijing encouraged banks to lend freely to government projects such as railways, airports and roads. Some of the loans have soured, and local government defaults now pose one of the biggest threats to China's growth. Local government liabilities amount to nearly 27 percent of China's total annual output, so if the state is forced to mop up those bad loans its deep pockets would look a bit more shallow. That means China would most likely rely on more modest measures if the economic outlook deteriorates. Possible steps include cutting taxes for small- and medium-sized businesses, ramping up investment in affordable housing, altering bank lending rules to get more money into the hands of smaller companies, and lowering interest rates. "We are still digesting the mess of the 2008 stimulus package," said Yu Xuejun, local head of China's banking regulator in Jiangsu province. "It's unrealistic to hope that China will come to the rescue of the global economy this time." In 2008, when the Lehman Brothers bankruptcy triggered a sharp global slide, China was among the first in the world to implement a large-scale stimulus package, pouring 4 trillion yuan into the economy. Local governments borrowed heavily from banks to cover their share of the stimulus, leading to an explosion of debt estimated at 10.7 trillion yuan. Some economists think as much as a quarter of that total could end up in default. The burst of spending helped China lead the economic recovery that began in 2009. But if it comes to reprising that role, banks may be leery of lending to government investment projects again given the well-publicized problem loans, said Vincent Chan, a research analyst at Credit Suisse in Hong Kong. "China may again be seen as a 'safe haven' as in late 2008, but this time its ability to rely on the old credit-cum-investment model to get out of trouble will be hindered by many more constraints," Chan said. — Reuters |
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